Russo, Democrats rally against McDowell participation in AT&T-BellSouth deal

WASHINGTON-Key House Democrats said Federal Communications Commission General Counsel Samuel Feder made a weak legal case for authorizing Commissioner Robert McDowell to participate in AT&T Inc.’s hung-up $79 billion acquisition of BellSouth Corp. Meanwhile, a top global equipment supplier warned further delay in approving the deal could hurt the manufacturing industry by slowing telecom investment.
Feder ruled Friday that McDowell, a Republican on the GOP-led FCC who has not been involved in the agency’s review of the deal because of past lobbying for a trade group representing Bell competitors, could become active in deliberations. McDowell has yet to indicate his intensions.
Feder followed up this week separately with answers to written questions by Reps. John Dingell (D-Mich.) and Edward Markey (D-Mass.), who are poised to become chairmen of the House Commerce Committee and the telecom subcommittee, respectively, when the new, Democratically-controlled Congress convenes early next year.
“I find the general counsel’s response inadequate in convincing the American people that Commissioner McDowell’s participation is necessary, proper or wise,” said Dingell. “The general counsel has not provided a thoughtful and appropriate explanation for departing from the advice of the Director of the Office of Government Ethics, which could lead reasonable people to question the integrity of the agency’s decision in this very important matter.”
The AT&T-BellSouth deal, unconditionally cleared by the Justice Department in October and currently stuck in a 2-2 deadlock along party lines in the FCC, would consolidate the two companies’ ownership of top mobile phone operator Cingular Wireless L.L.C.
“Nothing in the general counsel’s response surmounts the ethical hurdle placed before the Commission by the Director of the Office of Government Ethics Robert I. Cusick, who indicated to the FCC that if the decision were up to him, he would not authorize Commissioner McDowell’s participation in the AT&T-BellSouth merger proceeding,” said Markey. “Instead, the FCC General Counsel’s response highlights that there is no direct or persuasive precedent for ‘un-recusing’ Commissioner McDowell. I trust that Commissioner McDowell will find the FCC General Counsel’s weak legal arguments, and even weaker rationale for a compelling government interest, of little comfort when deciding whether to abandon the ethical high ground upon which he currently stands.”
Consumer groups also said McDowell should not jump into the merger fray at the FCC.
Meantime, Alcatel-Lucent CEO Patricia Russo urged the agency to approve the AT&T-BellSouth deal this month without any new network neutrality requirements on the two companies. Russo said failure to do so could hurt the telecom manufacturing sector.